2019 (7) TMI 1622 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - This adjudicating authority is of the considered view that operational debt is due to the Applicant and in support of that operational creditor has placed copy of the invoices at pages No. 16 to 20 to the application. That, service is complete and no dispute has been raised by the respondent. That, Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code - petitioner is able to establish that there exists debt as well as occurrence of default. The Application filed by the Applicant is complete in all respects - Petition admitted - moratorium declared.

Summary

Issues:
- Application under Section 9 of the Insolvency and Bankruptcy Code, 2016
- Existence of operational debt exceeding ?1.00 lac
- Documentary evidence of debt due and payable
- Dispute between parties or pendency of suit/arbitration
- Appointment of Interim Insolvency Professional
- Declaration of moratorium and initiation of insolvency resolution process

Analysis:
The judgment pertains to an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by an operational creditor against a corporate debtor. The operational creditor supplied coal to the corporate debtor based on a purchase order, leading to an outstanding debt of ?6,92,409.71 as of August 25, 2018. The applicant submitted documentary evidence, including demand notices, invoices, and balance confirmations, to support the claim. The respondent was served notices, but failed to appear, resulting in an ex parte hearing.

Upon examination, the Tribunal found that the respondent did not dispute the claim. The Tribunal had to determine the existence of operational debt exceeding ?1.00 lac, the due and payable status of the debt, and the absence of any dispute or pending suit/arbitration. The Tribunal referred to the Legislative Guide on Insolvency Law and concluded that the debt was valid, uncontested, and the applicant qualified as an operational creditor. The application was deemed complete and admissible.

The Tribunal approved the appointment of an Interim Insolvency Professional and declared a moratorium as per Section 13 of the Code. The moratorium prohibited various actions against the corporate debtor and ensured the continuity of essential services. The initiation of the insolvency resolution process was sanctioned, and the moratorium was to remain in effect until the resolution process was completed or liquidation was ordered. The judgment was communicated to all relevant parties, concluding the matter without costs.